Nhơn Trạch 2 plans 16 per cent dividend rate lift
PetroVietnam Power Nhơn Trạch 2 has proposed that the firm’s management board raise the dividend payment rate on last year’s business performance from 20 per cent to 36 per cent.
The former dividend rate of 20 per cent was approved at the company’s shareholder meeting in March 2016.
The additional dividend will include a 13 per cent payment in cash and 3 per cent payment in shares – equal to more than 8.6 million shares.
The company already completed dividend payments to shareholders in 2016.
The 20 per cent dividend was paid three times, with the first payment in August 2016 and the last one in January 2017.
In 2016, the company earned a total revenue of nearly VNĐ8 trillion, an increase of 19 per cent from 2015’s number, and a post-tax profit of VNĐ1.08 trillion, exceeding last year’s target by 49 per cent.
This year, Nhơn Trạch 2 targets a post-tax profit of VNĐ672 billion – 38 per-cent lower than last year’s result – and a 25 per cent dividend.
European firms optimistic about Vietnam’s business environment
European companies expressed optimism about the business environment in Vietnam during a recent meeting with the press, Cong Thuong (Industry & Trade) newspaper reported.
The European Chamber of Commerce in Vietnam (EuroCham) revealed the positivity from a survey on Vietnam’s business environment in the fourth quarter of 2016.
Nearly 73 percent of European businesses were optimistic about their operations in Vietnam, and only 5.5 percent were pessimistic.
Up to 90 percent of companies said they will maintain or increase investment in the Southeast Asian country, while 56 percent said they plan to keep or increase the number of employees, and a mere 6.7 percent plan to reduce staff.
The European chamber has held various activities to encourage enterprises to invest in Vietnamese localities such as Buon Me Thuot in the Central Highlands province of Dak Lak and the northern port city of Hai Phong along with other Central Highlands provinces.
It established a branch in the central region to help businesses step up investment in Quang Nam, Da Nang and Thua Thien – Hue, and hopes to set up more branches in Hai Phong and other localities.
This year, the chamber will accelerate the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) and clear up concerns raised by European firms, as well as host more dialogues between Vietnamese government representatives, ministries and agencies with European companies.
EuroCham expects the Vietnamese government to further improve the business environment and increase the competitiveness of the economy.
The chamber will devises measures to help businesses implement the EVFTA.
EuroCham’s Whitebook 2017 highlighting issues relevant to trade and investment in Vietnam is scheduled to be launched on March 2 this year.
Japanese bank buys into BIDV subsidiary
BLC, the finance leasing arm of the Bank for Investment and Development of Vietnam (BIDV), has been renamed as BIDV-SuMi TRUST Leasing Co. after Japan’s Sumitomo Mitsui Trust Bank bought a 49% stake.
The State Bank of Vietnam (SBV) has given approval in principle to the conversion of BLC into a joint venture. BIDV Financial Leasing Co. (BLC) was wholly owned by BIDV with chartered capital of VND447.8 billion, and headquartered in HCM City.
The capital of the joint venture is doubled to VND895.6 billion and the headquarters is in Hanoi. BIDV holds a 50% stake, Sumitomo Mitsui 49% and Sun Group 1%.
BIDV said it had been in a strategic partnership with Sumitomo Mitsui since 2013.
The two sides reached an agreement on cooperation in finance leasing in Hanoi on April 29, 2016, in which BIDV would sell 49% of its finance leasing arm to the Japanese partner.
BIDV-SuMi TRUST would be the first finance leasing joint venture between a local bank and a foreign financial institution in the country. The company will be put into operation when the central bank gives official approval.
When BIDV-SuMi TRUST is in place, BIDV would be able to roll out financial packages that meet diverse needs of customers for credit, insurance, finance leasing and securities.
Sumitomo Mitsui is Japan’s largest trust bank with total assets of nearly 59.5 trillion yen (US$585.4 billion) and equity of some 2.02 trillion yen (US$19.9 billion) by September 30, 2016.
Japan, Vietnam promote links in mechanical engineering industry
A first-ever fair highlighting manufacturing technologies opened in Hanoi on February 23, providing a good opportunity for broader cooperation between Vietnamese and Japanese enterprises involved in the mechanical engineering industry.
The fair attracted 138 enterprises, including Japan’s leading groups such Toyota, Canon, Honda, Yamaha, Tamron, and NEC.
As many as 28 enterprises from Hanoi joined the event.
Vice Chairman of the municipal People’s Committee Nguyen Doan Toan said Hanoi is home to 470 enterprises operating in the support industry, including over 250 mechanical firms, 132 electronic companies and 85 textile businesses.
Toan also noted that the capital city always pays heed to developing cooperation with Japan in all fields, especially in the mechanical engineering industry.
The two-day fair aims to help Vietnamese enterprises access high technologies, thus deeply joining global production networks, he said, adding that it lays a foundation for businesses to promote trade links in the time to come.
Complaints over expensive rice export licences
A discussion about ways to loosen Decree 109 on rice export has been held by the UK-based organisation Oxfam and Vietnam Chamber of Commerce and Industry (VCCI) on February 22.
Ngo Van Nam, representative of ADC Company in HCM City said Decree 109 was no longer suitable for the current economy. The ADC Company has a 35,000 hectare of material area and 16,000 farmers but has no intention to ask for the licence because of the high cost. Instead, they partnered with another company that already has the licence. Each time they want to export, they have to hire extra help to deal with the administrative procedures. He said the fee for the licence is USD20,000.
The regulations stipulate that once a company has a rice export certificate, it must export at least 10,000 tonnes of rice a year. ADC Company hopes that rice export contracts will be auctioned. Currently, big companies have most of the contracts and give the good ones to their familiar smaller companies. Other companies have to take risky contracts just to meet the quota.
Dang Thi Lien, director of Long An Food Company said the specific measurements of a required material area should be scraped so that firms can be more flexible to improve rice quality and meet social and environmental responsibilities.
Several experts said they could understand that the government might tighten the regulations on rice exports for food security, but Vietnam doesn’t have to worry about food shortages. If the government doesn’t change the regulations, farmers may continue to pursue quantity despite the cheap prices instead of quality.
However, the process should be considered carefully to avoid chaos. Tran Tien Khai from the University of Economics Ho Chi Minh City, agreed and said that government should also take lessons from the dwindling exports of shrimp, catfish and dragon fruits.
Meanwhile, Director of VCCI in Can Tho City Vo Hung Dung said there was no reason to blame small companies. He thinks only dumping by big companies could affect the market that’s why there was a need to create a fair arena for all businesses.
The Ministry of Industry and Trade recently signed a decision to abolish a limit the number of rice export companies at 150.
Vietnamese SMBs take advantage of online business trend to enhance competitiveness
E-commerce with multi-channel selling has become a popular method in the world which helps small and medium sized businesses (SMBs) optimise their operations.
“Online retail in Vietnam will continue to accelerate in the upcoming period as domestic and foreign retailers now move towards multichannel with considerable investment in online retail,” said Nguyen Ngoc Dung, vice president of the Vietnam E-commerce Association (VECOM) at the Vietnam Online Business Forum 2017 (VOBF) in Hanoi today.
This nationwide event is firstly introduced in Vietnam and expected to be held for e-commerce community in Vietnam annually.
Vietnam, with over 54 per cent of internet penetration and a large number of smart device users, is considered a potential market for e-commerce development.
According to VECOM, Vietnam B2C e-commerce retail sale in 2016 reached $5 billion, accounting for 3 per cent of the country’s total retail products and consumer. In the next five years, it is predicted to grow in two digit figure.
Dung said that this is a significant potential for Vietnam’s retail sector, especially, in order to boost e-commerce growth, Prime Minister Nguyen Xuan Phuc has approved the master plan for e-commerce development in the period of 2016-2020. Accordingly, by 2020, e-commerce retail sale is targeted to reach $10 billion, accounting for 50 per cent of the country’s total retail sale.
“However, difficulties are still present on our way to boost e-commerce and enhance the development of Vietnam’s retail industry. In the meantime, businesses need to unify their information in both real and cyber worlds in order to gain consumers’ trust which will then encourages consumer buying behaviour,” he said.
According to Nielsen’s Global Trust in Advertising 2015, Vietnamese consumers place most confidence in advertisements on search metrics, and then social networks, online video and banners.
In order to raise businesses’ awareness of the importance of building an online presence and conducting online marketing, prestigious experts representing for world’s big names such as Google, Nielsen, Facebook, Vietnam Post, Alibaba, Mat Bao and Verisign. have been invited to the forum to share their expertise and guidelines in this field.
At the forum, many experts have agreed that it is essential for every small business to have their own website. Given the ease of building a website these days, it’s possible for a business to build a high-quality website to showcase business, and to establish their brand in a form they can control. 77 per cent of small businesses agree that websites are the most effective online marketing tool for creating awareness and strengthening customer relationships, more than any other online marketing tool.
“The most effective way to do business online is to have a website and social media presence that work together to spread your message and foster relationships with the broadest customer audience. The first step towards building a successful and credible online presence is to choose the right domain name,” said Dung.
“By using trusted domain extensions, there is a level of credibility awarded to these businesses. Considered the global standard for doing business online, numerous global enterprises, including Fortune 500 companies, have chosen .com to build their websites with the desire of extending beyond the local audience,” said Le Hai Binh, president of Mat Bao. “Additionally, with the operational accuracy and stability of the .com DNS infrastructure for more than 18 years and over 127.5 million domain names registered globally, businesses are encouraged to choose .com to be the basis of their online presence.”
Rural areas new source of FMCG growth
Vietnam’s rural areas have been rising as a new source of growth for many fast-moving consumer goods (FMCG) manufacturers, with growth of 7 per cent in the last quarter of 2016, 0.3 per cent higher than in urban areas.
The latest report from market researchers Nielsen on Vietnam’s FMCG growth in 2016 showed that rural areas bounced back strongly in the final quarter of 2016, coming in at 7 per cent and contributing 51 per cent to total FMCG sales nationwide.
FMCG growth in urban areas was 6.7 per cent, with growth in both urban and rural areas primarily driven by volume increase.
“The build-up and positive sentiment towards the Tet holiday was one of the key drivers of FMCG growth,” said Mr. Nguyen Anh Dung, Director of Retail Measurement Services at Nielsen. “This momentum was enhanced by a willingness among consumers to spend, together with an improvement in sentiment among retailers.”
Growth in the year as a whole slowed down due to unfavorable weather conditions in the northern, central, and southern regions. Rural areas are expected to bounce back, as seen in the fourth quarter.
“Rural areas are still the largest consumer base and these consumers have increasing incomes that provide higher spending power,” Mr. Dung said. “They also have better access to the internet and smartphones in seeking information on products and quality.”
Given its importance, manufacturers should capture the opportunities in rural areas by equipping themselves with up-to-date knowledge on emerging consumer demand and market trends, he emphasized.
FMCG growth in the six key cities in Vietnam (Hanoi, Ho Chi Minh City, Hai Phong, Can Tho, Nha Trang, and Da Nang) saw a strong improvement in the last quarter of 2016, with 7.3 per cent growth versus a year ago; the highest for the last three years and mainly driven by an impressive increase of 6 per cent in volume growth.
The recovery was reflected in positive growth in six out of seven super categories, with Baby Care being the exception. FMCG growth saw major momentum in the Food category, with 11.6 per cent growth, and the Personal Care category, with 9.6 per cent growth.
Both Home Care and Cigarettes saw 8.1 per cent growth, while the Milk-Based category recorded 3.2 per cent growth. Beverages, including beer, continued to dominate FMCG sales in the quarter, accounting for 40 per cent of turnover and growing 7.3 per cent.
JETRO holds expo in Hanoi
More than 66 per cent of Japanese enterprises want to expand their manufacturing in Vietnam, Mr. Kawada Atsusuke, Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi, told the Factory Network Business Expo 2017 and Japan Parts and Processing Exhibition 2017, being held on February 23 and 24.
Nearly 65 per cent said that they have difficulties relating to localization, materials, spare parts and components.
JETRO therefore organized the event to connect Vietnamese and Japanese enterprises. Mr. Kawada believes that “this event will help enterprises find sales and new sales channels to boost both Vietnam’s and Japan’s economy.”
There are 138 enterprises taking part in the exhibition and 400 customers registered to trade. Enterprises taking part include manufacturers, processors, and enterprises providing parts.
There are also businesses providing services that support industry. Products are diverse and include product components, accessories, motor cars, motorcycles, electronic components and equipment, precision machinery and instruments, plastic products, and rubber. Major Japanese corporations in attendance include Toyota, Canon, Honda, Yamaha, Tamron, NEC, and Sony EMCS.
Deputy President of the Hanoi People’s Committee Nguyen Doan Toan said that the city is keen to develop cooperation with Japan in all sectors.
Export turnover between Hanoi and Japan continues to grow. In 2016 it reached $1.23 billion, accounting for 11.6 per cent of the city’s total export turnover. Exports to Japan are primarily base metals, electronic components, and computers.
Japan is the leading in FDI to Hanoi, with 800 projects and total investment capital of $5.2 billion.
F.I.T registers to buy 3 million Pharimexco shares
F.I.T Group has announced it has registered to buy 3 million shares of the Mekong Pharmaceutical Joint Stock Company (Pharimexco, stock code DCL), with a purchase expected to take place between February 24 and March 23.
Post-purchase, F.I.T will see its holding in Pharimexco increase from 64.62 per cent to 69.95 per cent.
Pharimexco has set a revenue target this year of VND914 billion ($40.03 million), an increase of nearly 24 per cent against 2016. After-tax-profit is expected to be VND96 billion ($4.2 million), up 7 per cent.
After-tax-profit in 2016 rose by half compared to 2015 and was more than 10 per cent higher than the target. After-tax-profit in 2015 was 91 per cent higher than in 2014. Profits boomed after its listing. The company also acquired the Euvipharm Pharmaceutical Joint Stock Company, a member of Canada’s Valean Pharmaceuticals International, Inc.
The company plans to focus on promoting its strategic resources for long-term development projects in 2017, including factory medical supplies and investment projects to expand capsule production, and will restructure Euvipharm.
Factory Network Business Expo underway in Hanoi
The first Factory Network Business Expo kicked off in Hanoi on February 23, bringing together 138 businesses from Vietnam, Japan, Thailand, China and Singapore.
The two-day event, which attracted many major Japanese groups such as Toyota, Canon, Honda, Yamaha and Tamron, was co-organised by the Hanoi Department of Industry and Trade along with Japan’s NC network Co., Ltd.
Taking place at the same time as the 2017 Japan Parts and Processing Exhibition, hosted by the Japan External Trade Organisation (JETRO), it aims to provide an opportunity for Vietnamese and Japanese businesses to foster exchange and cooperation in the mechanical engineering industry as well as boost the application of advanced technology in the manufacturing sector.
According to Nguyen Doan Toan, Vice Chairman of Hanoi city People’s Committee, Hanoi is now home to around 470 businesses operating in the supporting industry, with 250 of them working in mechanical engineering, 132 others in electronics, and 85 businesses in garment and textile.
He stressed that Hanoi always treasures cooperation with Japan in all fields, particularly the economics mechanical engineering industry in particular.
Holding that Japan has strong advantages as one of world’s leading economies with advanced science and technology, Hanoi co-hosted the trade fair with the hope of helping Vietnamese businesses to gain access to advanced technologies and further their participation in the global production networks, he said.
Government unveils action plan to improve economic competitiveness
The government has announced an action plan to implement the Party Central Committee’s resolution on enhancing the quality of growth, labour productivity and economic competitiveness.
Under the plan, the government aims to maintain economic stability, keep annual inflation under 5% and gradually reduce the spending deficit to below 3.5% by 2020.
Public debt during the 2016-2020 period is not allowed to reach 65%, which is to be brought down to 60% in 2030, while the ratio of bad debt is targeted at below 3% by 2020.
The government also aims to increase the size of the stock market to 70% of GDP in 2020, divest all State stakes in enterprises where it is unnecessary for the government to hold more than half of capital.
In order to achieve these targets, the government will endeavour to streamline economic management, push through the equitisation of State-owned enterprises and reform the financial market and public services.
The government will also take action to build a clean and high-tech agricultural sector and restructure key industries in a more substantive manner.
Under the action plan, the role of the private sector will be promoted with a wide range of supportive policies.
The Ministry of Planning and Investment has been tasked with formulating the Law on Support for Small and Medium Enterprises, while other ministries and local authorities have been asked to step up administrative reforms to facilitate business activities.
Young people face difficulties in buying houses because of increased prices
As per the Ho Chi Minh City Real Estate Association (HoRea)’s survey, over 50,000 newly-wed couples a year in the city desire to have their own house leading to the great demand of housing.
However, young couples have faced difficulties in buying a house of their own choice because of increased price of house and their limited financial condition.
In its survey, HSBC showed that young people who were born from 1981 to 1998 delayed their plan to buy their own house because of slow salary increment and continued rapid house price growth. Also the survey revealed that Asian young generation asked their parents for financially aid when they want to buy houses.
A survey comprising of 10,000 participants in 10 nations showed that four out of 10 young people have a house of their own accounting for 38 percent. Up to 81 percent of young people who have had a house and planned to buy a house within five next years.
69 percent of young residents said that they have not saved enough money for the first payment of a house and 39 percent of them said that they are unable to buy a desired house because price of house surged.
Meanwhile in Vietnam, HSBC reported that increased demand of house resulted from the “golden age” population with fast urbanization speed. Currently, one-third population or 32.8 percent is in the age of 25-45; half of them are young people.
Urbanization speed in Vietnam is 35 percent in 2016 and it will be 40 percent by 2020 which lead to economic hubs such as Ho Chi Minh City, the central city of Da Nang, Hanoi and the northern city of Hai Phong will be homes of 36 million within four next years.
U.S.-owned realty service company CBRE Vietnam forecast that house price in HCMC will soar in 2017 and increase by 10 percent in three next years. The realty service company also predicted that 43,861 condos will be sold in 2017.
HCMC to organize low cost housing design competition
The HCMC Department of Construction will organize a low cost housing design competition to build social housing projects for low income people in the city, announced director of the department Tran Trong Tuan yesterday afternoon.
According to Mr. Tuan, HCMC will be able to build social housing projects with the price of VND100 million (US$4,383) an apartment if project investment does not cover site clearance and technical infrastructure, enjoys land use fee exemption and an apartment area is less than 25 square meters and building cost is less than VND4 million per square meter.
However, Mr. Tuan said that HCMC does not encourage building of this type of house because it just should be developed for workers at industrial parks and export processing zones. The social housing program does not target the VND100 million housing but ways to build low cost housing for low income people in each district.
Therefore, the social housing program must be developed on the basic of approved plan to ensure the living space quality for citizens.
The reasonable housing price for low income people in HCMC is less than VND1 billion swinging from VND300-900 an apartment with diversified types and products to meet demand of households of different income and living conditions.
Next week, the department will work with the HCMC Real Estate Association to organize a forum, aiming to seek solutions to build low cost housing in HCMC.
VBSP to get extra VND20.8 trillion
The Government will allocate an additional VND20.8 trillion for the Vietnam Bank for Social Policies (VBSP) in 2016-2020, reports the Vietnam News Agency.
The amount will help its bank offset the capital shortfalls in previous years, increase its chartered capital, and fund its operating costs and interest rate differentials.
By December 31, 2016, the bank’s chartered capital reached nearly VND10.7 trillion.
VBSP said the extra capital is good news for the poor and policy beneficiaries. Poor and near-poor households, people who just escaped from poverty, and regions having high poverty rates or suffering from natural disasters will be prioritized to borrow from the bank.
As a non-profit bank for the poor and policy beneficiaries, VBSP has for 15 years contributed to reducing poverty in Vietnam.
In 2016, VBSP reported total outstanding loans of VND157 trillion for more than 6.7 million poor and near-poor households and policy beneficiaries.
Govt targets budget deficit below 3.5% of GDP
The Government will continue consolidating macro-economic fundamentals in the 2016-2020 period to curb inflation at under 5% a year and cut budget deficit to less than 3.5% of gross domestic product (GDP) in 2020.
According to an action program for implementing two economic restructuring resolutions of the Party and the National Assembly, public debt will be limited at no higher than 65% of GDP in the next five years. By 2030, public debt will fall to below 60% of GDP, government debt under 50% of GDP and foreign debt at less than 45% of GDP.
Besides, the Government plans to make the average lending rate in the country competitive with that of the ASEAN-4 group, and improve the stock, government bond, corporate bond and insurance markets. In 2020, stock market cap would account for 70% of GDP, bond market 30% of GDP and insurance revenues a minimum of 4% of GDP.
The Government also pledges to divest capital from all enterprises where the State has no need to own more than 50%. In 2020, the nation will have at least one million active businesses, and 15,000 cooperatives and agricultural cooperative unions with healthy operations.
Japanese manufacturers come knocking in Hanoi
Representatives of 20 Japanese firms active in Vietnam are attending the Japan Parts & Processing Exhibition 2017 in Hanoi from February 23 to sound out business opportunities.
Toyota, Canon, Honda and Panasonic are among the firms participating in the event, which is being organized by the Japan External Trade Organization (JETRO) Hanoi Office, to look for parts suppliers.
The exhibition offers small and medium enterprises of Japan an opportunity to find buyers overseas and purchase parts in Vietnam. Vietnamese firms wishing to sell their products to Japanese companies can show up at the event.
A same event also takes place at the Factory Network Business Expo 2017 at the National Exhibition Construction Center on February 23 and 24.
These two events attract over 100 small and medium Japanese firms from Japan, China, Thailand and Vietnam, as well as around 10 Vietnamese enterprises.
The governments of Vietnam and Japan have created plenty of business opportunities and promote cooperation between manufacturers from both nations, according to the Ministry of Trade and Industry.
A recent survey conducted by JETRO shows 66.6% of Japanese businesses in Vietnam have plans to expand their investment activity in the next one or two years. However, around 64.8% have difficulty finding local materials, parts and components.
Therefore, JETRO organizes exhibitions on supporting industries, and updates the list of Vietnamese and Japanese suppliers to promote links between suppliers and buyers.
Ways sought to thwart tax evasion, transfer pricing
Authorities met in HCMC on February 22 to find ways to prevent tax evasion and transfer pricing.
The HCMC Tax Department said in a report at the meeting that on target would be transfer pricing, food and related services, firms with questionable bank transactions, imported autos declared as gifts, e-commerce, tourism, fuel trading, people with huge incomes, and household businesses.
As for transfer pricing, authorities will look into transactions between related entities within an enterprise, especially in the foreign direct investment (FDI) sector, and those which use suspicious price determination methods.
The department said bank transactions that involve people who are not staff of relevant enterprises or who lend to enterprises with unclear payment processes via banks would be monitored to determine whether or not there are irregularities.
Individuals must pay special consumption, value-added and income taxes if they sell imported cars declared as gifts at prices much lower or higher than the market prices of the autos specified in the Ministry of Finance’s Circular 195.
In the past time, many e-commerce firms have broken regulations by failing to declare their sales, particularly of products ordered online and paid on delivery. A number of tour operators have been found to let their foreign partners use their tourism licenses for organizing inbound tours for foreign travelers.
HCMC will also crack down on non-invoiced fuel sales which have caused State budget revenue losses. Currently, the city has 532 gas stations.
The report said well-paid artists and other individuals with high incomes would be on the radar as well.
The department said inspections last year resulted in additional tax revenues of VND116 billion from transactions conducted by related enterprises within an organization, VND92 billion from firms which had not been inspected for years, VND92 billion from property transfers, VND27 billion from businesses with unclear transactions via banks, VND27 billion from multi-level marketing companies, and VND15 billion from imported autos declared as gifts.
The city has set a target of carrying out tax inspections into at least 18% of taxpayers and transactions suspected of transfer pricing.
HCMC looks to attain tax revenues of more than VND347.88 trillion (US$15.2 billion) this year, up 15.79% from 2016. The amount consists of VND226.5 trillion from domestic sources, VND109 trillion from imports and exports, and VND12.4 trillion from crude oil.
Dai-ichi Life Vietnam launches priority Australia study program
Dai-ichi Life Insurance Company of Vietnam (Dai-ichi Life Vietnam) on February 22 launched a “Priority Enrolment to Study in Australia” partnership program for customers having children aged up to 12 and planning to send them to Australia for study.
Following the “Priority Enrolment to Study in the USA,” the program for Australia is the second and the only one in Vietnam that combines life insurance and overseas study enrolment, coordinated by Dai-ichi Life Vietnam and Laureate International Universities, an American educational organization.
A Certificate of “Priority Enrolment to Study in Australia” will be issued for those purchasing “An Phuc Hung Thinh” life insurance policies with a duration of 6, 9, 12, 15, 18 or 21 years, in addition to basic benefits such as full coverage against risks, attractive savings with competitive interest rates, periodic cash coupons. It is seen as a passport to the future for their children as they reach 18.
Certificate holders’ children will be entitled to priority entrance to Torrens University Australia, a private university in Australia which belongs to the Laureate International Universities network.
HCMC gets Japan aid to upgrade drainage system
Japan will provide around VND300 billion out of the total VND323 billion (US$14.1 million) needed for a project to upgrade an aging water drainage system in HCMC.
In a report sent to the Ministry of Planning and Investment, the city said the project would upgrade deteriorating sewers in the downtown area to prevent roads from caving in and minimize environmental pollution.
The HCMC Steering Center of the Urban Flood Control Program, the project owner, will repair and rehabilitate 4,000 meters of sewer in districts 1 and 3 between 2017 and 2020.
The city will need VND97.3 trillion (US$4.26 billion) for flood control projects in the 2016-2020 period and has arranged nearly VND23 trillion of the total for projects under way. The city looks to raise the remaining VND74.35 trillion in the next four years.
The city’s population is over 10 million people, excluding migrants. Fast population growth here has caused a five-fold increase in wastewater discharge volume, putting huge pressure on the current drainage systems.
New tech changes recruitment landscape
More companies in Vietnam are applying new technology to recruitment, with Digital HR, Technology HR and HR Analytics growing popular in the human resource world.
Half of the major firms in Vietnam use technology and social networks for recruitment. Recruitments on LinkedIn account for 43%, Facebook 5%, Vietnamworks 28%, Anphabe 5% and other channels 19%, says a company.
Huynh Nhu Tiep at the personnel department of CSC Vietnam Co said new technology had helped her company hire 100% of staff directly instead of through a headhunting firm, thus shortening the recruitment time and cutting costs.
She was speaking at a seminar on the power of technology in recruitment held by the Vietnam Human Resources Club (VNHR) in collaboration with Talentnet in HCMC on February 22.
LinkedIn and Facebook are among the most effective recruitment channels at the moment. LinkedIn offers a variety of tools that allow employers to optimize the search for candidates, greatly reducing the time for recruitment.
Facebook enables employers to access a lot of people as its livestream tool allows them to effectively respond to questions asked by candidates. A company said that after a three-month notice on their Facebook page, they had received 800 job applications, with 80 of them selected.
It is now trendy for enterprises to combine recruitment with branding and marketing thanks to the availability of technology.
However, without proper investment and good preparations, a recruitment campaign on a social network could affect a company’s brand. “Content posted on a social network must be approved by the legal department and the communications department. We also hire outside consultants to handle negative comments,” said a company representative.
Multinationals like Unilever even take a step further by designing scientific and funny games to check whether or not a candidate is fit for a job.
Mekong Beauty Show to show off cosmetics in HCM City
Mekong Beauty Show, the only business-to-business beauty exhibition in Việt Nam, will be held in HCM City from June 15 to 17.
More than 200 exhibitors from Việt Nam, Europe, South Korea, Thailand, Malaysia, Singapore, Indonesia, Malaysia, Japan, China, Hong Kong, and India will take part.
It would be the region’s leading trade platform for beauty professionals seeking to capitalise on the fast-growing market in the four Mekong countries of Việt Nam, Cambodia, Laos, and Myanmar, Nguyễn Văn Minh, deputy chairman of the Vietnam Essential Oils, Aromatherapy and Cosmetics Association, said.
Claudia Bonfiglioli, international director of Informa Beauty, the show’s organiser, told a press conference in HCM City on Thursday, “The Vietnamese market remains one of great potential for cosmetics and beauty salon products.
“Việt Nam will become very soon a premium country for cosmetics.”
The annual turnover of the Vietnamese cosmetics market is around VNĐ15 trillion (US$704.2 million), according to figures from Nielsen, the market research giant.
But the average spending by those who buy cosmetics is only US$4 per person per year compared with $20 in Thailand, it said.
According to a report from the HCM City Society of Cosmetics, the country has more than 400 cosmetics businesses, with 90 per cent of the market share cornered by foreign brands.
Most popular domestic brands such as Saigon Cosmetic, Thorakao and Lan Hảo are confined to the low-value segment and mainly export to neighbouring Asian markets, the report said.
Lý Nguyễn Lan Phương, general manager of the Saigon Cosmetic Company, said more than 40 per cent of the company’s revenues comes from exports to Cambodia, Laos, and Thailand.
Dominic OH, director of South Korean company Kintex, said: “Based on the rapid economic growth, with GDP increase of 6 per cent per year, and young people who are familiar with improving their
appearance, the Vietnamese beauty market will be constantly growing.
“The Vietnamese market is ranked number 1 by K-beauty companies.”
The event, organised by Informa in co-ordination with Kintex at the Saigon Exhibition and Convention Centre in District 7, is expected to attract more than 10,000 business visitors.
HDBank further strengthens ties with Japanese businesses
The Housing Development Commercial Joint Stock Bank (HDBank) last Tuesday met with a Japanese business delegation led by the deputy mayor of Sakai city.
The delegation included executives from 12 companies that manufacture machinery and equipment.
At the meeting, the two sides spoke about each other’s strengths and discussed possibilities and opportunities for boosting mutual co-operation towards building a comprehensive and long-term co-operation between HDBank and Sakai city.
Through the event, HDBank expected to be a bridge connecting Japanese firms from Sakai and Vietnamese enterprises.
In recent years economic co-operation and cultural exchanges between Việt Nam and Japan have developed rapidly.
In 2014 HDBank and the Japan-based Hyakugo Bank Ltd established a Japan desk to support Japanese companies in Viet Nam.
In May last year HDBank signed an agreement with Senshu Ikeda and Aichi banks to enhance the delivery of services to Japanese firms.
The Vietnamese lender, together with Hyakugo Bank and Banrai Trading Company, organised a business-matching seminar for the Vietnamese and Japanese food industries.
Lotte mart launches big promotion
Lotte Mart on February 24 launched Beauty Expo featuring promotions, art performances, joyful activities and other events at all its stores around the country.
To be organised in March and October every year, the programme promises customers a new and enjoyable shopping experience on the occasion of International Women’s Day and Vietnamese Women’s
Day, Nguyen To Kieu Trinh, Lotte Mart’s marketing director, said.
The first edition of Beauty Expo, which will go on until March 8, has attracted the participation of 250 prestigious brands like Unilever, L’Oreal, Diana, Hoa Thien Phu and Provence, who are offering more than 1,000 items like beauty and healthcare products and gift boxes at discounts of 5-49 per cent.
On weekends customers who buy at least VND300,000 worth of products will get free advice on make-up and skin and hair care and a chance to take part in free flower arrangement and painting classes.
Customers also have a chance to win attractive prizes, including trips to Thailand and gift vouchers worth VND3 million in a lucky draw.
Japanese brand launches marketing push in Vietnam
Rising incomes, an expanding economy and changing consumer patterns are attracting a growing number of international brands to Vietnam.
Japanese sports brand Mizuno has just gotten on the band wagon having this month announced a marketing push with the signing of football player Nghiem Xuan Tu, volleyball player Nguyen Linh Chi and futsal player Tran Van Vu as brand ambassadors.
Earlier in February, Mizuno signed a US$50,000 contract with Vietnam top badminton player, Nguyen Tien Minh, to work as its brand ambassador.
Boston Consulting Group says Vietnam is Southeast Asia’s fastest-growing middle class. According to BCG the “middle and affluent class” earning US$714 a month or more in Vietnam will double to 33 million people, about a third of the population, between 2014 and 2020.
With forecasts like this, Vietnam can expect to see more brand ambassadors of Japanese and other international brands in the near future.
Golf industry show heads to Danang in May
Leaders of top golf organizations from throughout Asia will gather in the beach city resort of Danang on May 7-13 for their annual golf course industry and tourism conference.
The CEO panel will include chief executive officers from 240 golf operators from 36 countries along with an estimated 650 representatives of travel agencies, airlines, government agencies and other tourism related organizations.
The program will allow these leaders to share their organizations’ specific insights on key industry challenges, including water use, player development, tourism promotion and delivering profitability.
It will also give the golf industry the opportunity to showcase how allied organizations are working together to strengthen advocacy efforts with governmental policy makers and communicate with golfers of all ages.
Hundreds of exhibitors are expected, with most coming from the four segments of equipment, turf applications, golf carts and accessories. The show also features marquee events with entertainment, networking and recognition of award winners and industry leaders.
Canadian Minister leads trade mission to Vietnam
The Canadian Minister of Agriculture and Agri-Food is leading a trade mission to Vietnam and India as part of his government’s efforts to strengthen and expand Canada’s trade relationships in the Asia-Pacific region.
During his visit on February 26-March 10, Canadian Minister MacAulay will be meeting with his Vietnamese and Indian counterparts as well as industry representatives to discuss topics of common interest, expand new opportunities in key Asian markets, and strengthen Canada’s relationship with the two countries.
He will be accompanied by a group of Canadian industry associations representing a variety of agriculture, agri-food and seafood segments to demonstrate his government’s efforts to strengthen and expand his country’s middle class job opportunities, supported by trade relationships in the Asia-Pacific region.
Last year, Canadian businesses exported more than US$187 million and US$916,560,000 in agricultural, agri-food, fish and seafood products to Vietnam and India, respectively.
Canada is the 5th largest agricultural exporter in the globe, and the agriculture and agri-food industry employs 2.2 million Canadians, or one out of every eight jobs in the North American country.
Stock market, a good channel for capital mobilization
Ho Chi Minh City contributes 90% of Vietnam’s stock market value. Last year the city recorded capitalization growth of 30% and market liquidation of 24%. The authorities and businesses expect that the stock market will do better this year.
At the Ho Chi Minh City Stock Exchange (HOSE)’s first trading session of the New Year, Secretary of the municipal Party Committee Dinh La Thang said with last year’s results and acceleration of state-owned enterprise equitization, the city’s stock market will have momentum to grow this year.
Mr Thang pledged “to help businesses become stronger and more efficient. We’ll help businesses and the Stock Exchange grow because their success is Ho Chi Minh City’s success.”
Economists say the stock market continues to be an effective channel for mobilizing resources for the economy. Ministries and sectors have stepped up national economic reform and state-owned enterprises equitization.
Last year large-cap stocks pushed the market up, with seven of the 10 highest-valued stocks gaining, including Vinamilk, BIDV, Vietcombank, Vietinbank, and insurer Bao Viet Holdings.
In January, the Vn-Index surpassed 697 points, up 5% since late 2016. It was VN-Index’s highest mark in 9 years.
Economist Tran Hoang Ngan said, “This year, Vietnam’s stock market will have more commodities. Market capitalization will amount to about 50% or 60% of the national gross domestic product.”
Vice General Director of the Ho Chi Minh City Stock Exchange Le Hai Tra recommends raising Vietnam’s stock market ranking to attract foreign investment.
He said, “We have to increase the number of big companies on the bourse and the rank of Vietnam’s stock market. It will help draw foreign investment to Vietnam.”
According to Vu Bang, Chairman of the State Securities Commission (SSC), there will be more opportunities for HOSE to grow stronger in 2017 as the government continues to remove difficulties for enterprises.
“We’ll continue to reform the structure of Vietnam’s stock market and bourses in HN and Ho Chi Minh City to make them more dynamic,” said Bang.
Equitization of state-owned enterprises will increase commodities for the stock market and create a new investment wave for HOSE in particular. In addition, flexible monetary policies in 2017 and steady interest rates will create more growth opportunities for the stock market.
Vietnam to collect tax arrears from online hotel booking services
Foreign-based online accommodation booking services will be the next to be targeted by Vietnamese tax authorities in an effort to improve fair competition for local businesses.
At the end of 2016, Vntrip.vn – a Vietnamese online hotel booking site – publicly accused its rival Agoda.com of having avoided performing its tax duties in Vietnam despite having expanded its operations to the Southeast Asian country.
Agoda.com, a Singapore-based company, has run its Vietnamese version since 2010 and currently cooperates with over 9,200 local hotels and vacation rentals.
According to Le Dac Lam, CEO of Vntrip.vn, the Singaporean booking service pockets as much as 20% of the room prices paid by customers to its partner hotels, while not being taxed at all on the income.
The executive estimated that the total revenue of Vietnam’s hotel industry would be around US$21 billion in 2020, 50% of which will be coming from online hotel booking services, equivalent to US$10.5 billion.
At the commission rate of 20%, such foreign-based booking sites as Booking.com or Agoda.com would be bagging billions of untaxed dollars that could have gone to Vietnam’s government budget, Lam said.
Responding to Vntrip’s denunciation, the Vietnamese Ministry of Finance last month issued a dispatch demanding that provincial and municipal tax bureaus impose tax policies on online accommodation booking services provided by foreign companies in Vietnam.
Sites such as Agoda, Traveloka, Booking and Expedia are subject to both value-added tax (VAT) of 5% and a corporate income duty of 5% based on their revenue, the dispatch reads.
The Vietnam-based partners of these companies are responsible for the declaration and payment of tax on their behalf, and the State Bank of Vietnam is to work closely with tax authorities in monitoring the revenue of the firms based on their customers’ transactions, according to the ministry.
In an interview with Tuoi Tre (Youth) newspaper, Nguyen Nam Binh, deputy director of the Ho Chi Minh City Tax Bureau, said foreign entities and individuals who do business in or receive income from Vietnam are subject to foreign contractor tax (FCT), which is basically comprised of VAT and corporate income tax, even if they are not legally represented in the country.
“The dispatch by the Ministry of Finance is just a clarification of this law rather than the introduction of a new one,” Binh explained.
He said Ho Chi Minh City would continue to carry out inspections on local hotels to check their tax compliance and collect tax arrears from all payments made by these hotels to foreign online booking sites.
GotIt! has new CEO
GotIt!, an on-demand marketplace founded by Mr. Tran Viet Hung, has a new CEO.
The startup’s co-founder Mr. Peter Relan replaced Mr. Hung on February 23 and it launched its new website www.gotitapp.co! on the same day.
“I finally convinced my co-founder Peter Relan to run GotIt! as CEO, focusing on the business side, and I’ll focus on products, engineering, and cool tech,” Mr. Hung said. “This year will be epic.”
Mr. Relan is best known as Co-founder of GotIt!, Co-founder & CTO of Webvan and Founder of gaming and mobile incubator YouWeb in Silicon Valley. He funded and became co-founder of GotIt! In 2013.
GotIt! instantly connects students with an expert, who interactively works with them through a step-by-step explanation of school work problems in ten-minute sessions. It became the second-most downloaded education app on the App Store in the US, following only Apple’s iTunes.
Established in 2013, the startup is headquartered in Silicon Valley, where it has attracted talent who previously worked for tech giants such as Google, Facebook, and Oracle. The company also has a branch in Vietnam where it employs engineers. It successfully raised over $9 million in Series A and seed funding on April 29 last year.
Criteo marketing techonology boosts Tiki’s revenue by 64%
Criteo’s technology helped Tiki record a 184 per cent increase in its app conversion rate and a 64 per cent increase in monthly revenue in just three months, Tiki announced on February 22.
Tiki evaluates a marketing channel’s effectiveness by examining how it improves customer engagement, sales acquisition, and overall revenue. Since July last year, Criteo’s performance marketing solutions have delivered positive results to Tiki’s branded mobile app, with a 67 per cent increase in average order value.
Vietnam is a truly a “mobile-first” market. Ninety-seven per cent of local shoppers are regular users of mobile shopping apps, of which 88 per cent have completed purchases via an app. In order to effectively convert consumers of PCs and smartphones, Tiki turned to Criteo’s cross-device and in-app performance marketing solutions.
Powered by the Criteo Engine, these solutions use machine learning to compute an individual’s preferences and readiness to purchase, by assessing online browsing behavior across devices. It then automatically delivers personalized content – relevant and recommended products – after a shopper has exited Tiki.vn. This encourages the user to return and complete a purchase.
According to research by Criteo, shoppers use apps like Tiki.vn because they enjoy the variety of goods and services available on a single platform. But large product catalogues mean consumers are often unaware of certain products that best meet their needs. To ensure they discover the right products, e-commerce providers must use technologies that empower them with a more personalized customer engagement strategy.
“Criteo’s performance marketing solutions allow for more meaningful shopping experiences and thus increase interactions and conversions, further driving e-commerce growth for retailers in Vietnam,” said Mr. Alban Villani, Commercial Director, Southeast Asia, at Criteo.
“Criteo’s ability to deliver highly personalized advertising content helps consumers discover products that truly meet their needs,” said Mr. Phan Tuan Anh, Head of Marketing at Tiki. “This has increased positive customer interactions and enhanced our status as a trustworthy e-commerce provider. Criteo has become an important partner for Tiki and we are very satisfied with the results so far.”
Founded in 2010, Tiki was one of the first e-commerce startups in Vietnam. After achieving success as an online bookstore, the company began diversifying its offerings six years ago to include electronics and lifestyle goods. However, its vast online catalogue of more than 300,000 products soon became hard to manage. While Tiki was regularly updating its inventory with new items to meet a variety of needs, it found that the millions of daily website and mobile app visitors were unable to keep up with its latest products. This made it challenging to drive sales conversions for these new offerings.
Đồng Nai to increase cocoa cultivation area
The southeastern province of Đồng Nai expects to grow an additional 500ha of cocoa by 2018, bringing the total area of cocoa in the province to 1,000ha.
The province’s Department of Agriculture and Rural Development said it was implementing six large-scale cocoa fields.
Nguyễn Hữu Định, the head of the province’s Rural Development Sub-department, said besides implementing large-scale cocoa fields, the province has also provided farming techniques, loans and fertiliser to farmers.
The province’s cocoa productivity has increased to 10 tonnes per ha.
Trọng Đức Cocoa Co, which takes part in a large-scale field project, has signed purchase of long-term contracts with farmers to guarantee cocoa outlets.
The company buys cocoa at a price of more than VNĐ6,000 per kg (US$0.28), higher than the market price. Purchase price may change based on the market price.
Cocoa trees are easy to grow, have less disease and can be harvested in more than 10 years, according to cocoa farmers in Đồng Nai Province’s Định Quán District.
The total investment for one ha of cocoa is about VNĐ20 million ($900) and the profit will be VNĐ50 million ($2,240) a year, they said.
This year, Đồng Nai farmers will grow 200,000 cocoa trees on 250ha, according to Đặng Tường Khanh, the director of Trọng Đức Cocoa Co.
The company’s products from cocoa, which include chocolate and wine, are exported to South Korea and Japan.
Trà Vinh destroys thousands of smuggled cigarettes
The Cửu Long (Mekong) Delta province of Trà Vinh on Thursday destroyed 58,000 packages of smuggled cigarettes and 297 goods that had unknown origin or were counterfeit.
The province’s Steering Committee 389, which combats smuggling, commercial fraud and counterfeit goods, burned all the packages that were found.
More than 40,000 packages were Hero brand cigarettes; 14,000 were Jet cigarettes; and 1,620 packages were Scott cigarettes.
Counterfeit goods and goods with unknown origin included children’s toys, watches, cosmetics, medicine and phone accessories.
Last year, Steering Committee 389 found 100,000 smuggled cigarette packages and handed out fines of nearly VNĐ3 billion (US$135,000).
Nguyễn Xuân Hiệp, deputy director of the province’s Department of Industry and Trade, said that Steering Committee 389 fined violators involved in 1,222 cases last year.
Of the total number, 576 cases involved transportation of prohibited or smuggled goods; 507 cases, commercial fraud; and 34 cases, counterfeit goods.
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